SOCIMIs look out for shrinking margins and possible rents corrections

SOCIMIs look out for shrinking margins and possible rents corrections
Ismael Clemente, CEO of MERLIN Properties

More than three hundred managers and professionals attended the sixth edition of the Iberian REIT & Listed Conference, which has already established itself as one of the most important meetings for the real estate sector in Spain and Portugal. Once again, Iberian Property joined forces with EPRA to organise this conference, which took place the 6th of February in the distinguished Rosewood Villa Magna hotel in Madrid, counting with the support of Aedas Homes, BNP Paribas Real Estate, Clifford Chance, Colonial, Lar España, Merlin Properties, and Morais Leitão.

Surprised on the positive side, Ismael Clemente, CEO of MERLIN Properties, confirmed the "really good year" on performance for Spanish SOCIMIs. In his view, the challenge on valuations creates lack of understanding, resulting in the NAV share price discrepancy, despite the share price having performed quite well in the last year.

The CEO main concerns for 2024 are long-term effects of productivity, shrinking margins and possible rents correction, besides slowdown in private consumption. In what respects to Merlin’s activity, the company is undergoing a very significant CAPEX program, and making an additional effort to enter a new segment (Data Centres), so obtaining capital in the most efficient way will also be a priority.

"Despite the tepid outlook, 2023 has been a good year. In offices, we expected a drop in occupancy of 100-150 basis points, which did not materialise. In addition, consumption has been magnificent, very impacted by the performance of shopping centres and the robustness of the consumer. Logistics has also been very good2024 looks set to be a year of continuity," Ismael Clemente remarked.

MERLIN Properties has decided to strategically increase its digital economy, on one hand with its e-commerce logistics platform, and on the other hand with the investment in data centers.

"We are receiving equipment, now its time to fit into the facilities, finish the job, and demonstrate to the market Data Centers was the right bet", added the CEO of the Socimi when talking about this promising sector.

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